NEW DELHI: Adequate budgetary allocations must be made available to the armed forces in view of the present scenario of heightened tensions with certain neighbouring countries, the Parliamentary Standing Committee on Defence said on Wednesday.
Referring to the gap between the demand of the three services for capital outlay and the budgetary allocation, the panel recommended that the defence ministry should not make any reduction in the outlay in the coming years.
In a report tabled in the Lok Sabha on Wednesday, the committee noted that a demand of Rs 2,15,995 crore was projected under the capital head for 2022-23, but the allocation made was Rs 1,52,369.61 crore.
It said such curtailment of funds could end up compromising the operational preparedness of the defence services.
"The committee further note that at BE (budget estimate) stage in 2022-23, the gap between the projected and allocated budget for Army, Navy and Air Force is Rs 14,729.11 crore, Rs 20,031.97 crore and Rs 28,471.05 crore respectively, which are remarkably high," it said.
The committee said it was of the view that in the "present scenario of heightened tensions with our neighbouring countries, especially at borders of our country, such situation is not conducive for defence preparedness".
The panel, in its previous reports, had recommended making capital budget "non-lapsable" and "roll-on" in nature.
The committee said it was apprised that a draft cabinet note for the non-lapsable defence modernisation fund is under consideration.
"The committee observe that out of the total budgetary allocation of Rs 3,43,822.00 in 2020-21, only Rs 2,33,176.70 have been utilised by the ministry up to December 2020," it said.
The committee is headed by BJP MP Jual Oram and comprises around 30 lawmakers, including Congress MP Rahul Gandhi and Nationalist Congress party (NCP) leader Sharad Pawar.
The panel recommended to the defence ministry to expedite the constitution of the "non-lapsable defence modernisation fund -- defence renewal fund" that could be used exclusively for the procurement of critical defence assets at critical times.
About the Indian Air Force (IAF), the committee said it should have "two front deterrence capabilities", which is of utmost priority as the "threat on both sides of Indian neighbourhood is a reality which cannot be ignored".
The committee was making a veiled reference to the security threats India is facing along its borders with Pakistan and China.
It, however, did not name the two countries.
"Accordingly, equipping our armed forces with all possible combat capabilities is the need of the hour. The firepower of Air Force is proportionate to the fighter squadrons in its kitty," the panel said.
"During evidence, the representatives of Air Force submitted that the present authorised strength of squadron is 42.
It was further stated that the total technical life of most of the existing squadron is expiring and consequently, the squadron strength is progressively depleting," it added.
The committee also suggested that the IAF should ensure that new aircraft are procured in the near future so as to enhance its combat capabilities.
"The committee are of the view that fighter squadron strength cannot be counted merely on the number of aircraft but also their weapon carrying ability, lethality and range to fly and strike," it said.
"Therefore, no compromises in terms of firepower and technology should be made while inducting fighter jets in Air Force," it added.
The panel also asked the defence ministry to be more cautious and transparent in ensuring the fulfilment of offset requirements in defence contracts.
According to a report tabled in Lok Sabha by the panel, a total of 57 defence offset contracts have been signed as on date and the total obligations under them are estimated at around USD 13.
52 billion "to be discharged over a period from 2008-2033".
"Out of the total contracted obligations USD 4.59 billion has been discharged by the vendors, of which USD 2.9 billion has been accepted in audit and the balance claims are under clarification/examination," it said.
The committee, while appreciating the efforts of the ministry in bringing down the total offset obligations, expressed the hope that it would take appropriate measures in the "right earnest" for clearing the balance claims at the earliest that are under "clarification/examination".
It said such a measure would result in further strengthening of the defence industrial base.
Under the offset policy, the foreign defence entities, for all contracts worth Rs 2000 crore or more, are mandated to spend at least 30 per cent of the total contract value in India through procurement of components, transfer of technologies or setting up of research and development activities.
However, the offsets are not applicable to procurements under 'fast track procedure' and in 'option clause' cases if the same was not envisaged in the original contract.
Further, no offsets are applicable in contracts under intergovernmental agreements.
"While expressing satisfaction that the Defence Offset Monitoring Wing is effectively discharging its duties, the Committee recommends the ministry to be more cautious and transparent as the scope of offset has been increased from Rs 300 crore to Rs 2,000 crore or more," the committee said.
"The Committee desire that the ministry should try to establish some import substitute products industry while discharging the 30 per cent obligation," it said.
On foreign direct investment in the defence manufacturing sector, it said the amount is over Rs 3243 crore between 2014 and 2021.
The committee, headed by Jual Oram, comprises around 30 lawmakers including Congress MP Rahul Gandhi and NCP chief Sharad Pawar.